Hospitality Ulster concerned at unintended effect of new national living wage on sector

31 March 2016

The hospitality sector across Northern Ireland has expressed concern about the unintended effect of the introduction of the new national living wage which starts from 1st April (tomorrow).

The concern has grown due to the fact that employers in the sector can no longer drive greater efficiencies out of their businesses, leaving the only option to potentially lay people off. These concerns mirror the comments from the Office for Budget Responsibility (OBR) which predicts that tens of thousands of workers could lose their jobs - or see their hours reduced - as employers try to compensate for the extra cost.

The national living wage increase comes at a time when the hospitality sector faces other pressing challenges relating to the likes of the general cost of doing business, rates and Tourism VAT. Tourism numbers into Northern Ireland have increased in the last year, the airports are bringing forward new routes and airlines, but overall spend is down. Less spending with increased costs is putting the sector in an increasingly precarious position at a time when the NI Executive is trying to place an emphasis on reducing red tape and give business more freedom to generate revenue.

Colin Neill, Chief Executive of Hospitality Ulster said:

“We are a people industry and want to see those working in the sector benefit. We want to see our staff earn more, but by forcing a new national living wage upon the sector at this time will have an unintended consequence as employers will have to potentially cut staff and try to allocate an already stretched income even further”.

“We can’t replace our people with robots, they are the lifeblood of the sector and the backbone of our tourism offer”.

“This is another way in which the lack of the modernisation of legislation, including the liquor licensing legislation in Northern Ireland is squeezing the industry and making it very difficult to grow. We want to pay our staff more but to do that we need to Northern Ireland Assembly to give us the tools to do our job and build additional income”.